Making Mass Loan Modifications Easier

As detailed in the new Obama administration mortgage plan, the industry is going to be called on to save 9 million Americans from foreclosure this year. How do you rescue 9 million people facing foreclosure? The government will use the GSEs to refinance a portion of those underwater loans and servicers will be called on to modify 3 million to 4 million loans. So what's a servicer to do?

Certainly, technology is required. As an example of what's in the market today, Jacksonville, Fla.-based Lender Processing Services has created RediMod, an end-to-end solution for streamlining the mass loan modification process. RediMod is an automated solution that addresses processing and fulfillment needs for mass loan modifications by automating loan eligibility and best-fit determinations for modification programs.

The tool also includes customer contact strategies that are integrated across multiple contact channels and customer follow-up capabilities that can be tailored to the servicer's requirements. Using RediMod, servicers can assist their delinquent and at-risk borrowers without replacing or upgrading their core technology infrastructure. "Servicers are under increasing pressure to limit the number of defaulted loans and assist borrowers in their efforts to stay in their homes," said Dan Scheuble, co-chief operating officer of LPS and president of the mortgage processing services division, in a prepared statement. "RediMod provides a flexible and immediate solution that extends a servicer's current technology rather than replaces it, allowing for a very quick implementation."

While RediMod is intended to provide a complete solution to servicers, it has been developed in a modular fashion - allowing those with partial workout processes in place to add capabilities as needed. The solution includes data and analytics models that assign each loan in a portfolio a default propensity and loss severity score, as well as a configurable rules engine that identifies the borrowers who are delinquent or at risk of defaulting. These loans then are run through a process that identifies the best possible workout option based upon factors, set by the servicer, such as loan type, net present value or investor. When the best workout option has been determined, LPS creates the appropriate modification package - either paper or as an electronic document - and delivers it to the borrower and images it for quality control. LPS also provides customer follow-up to ensure modifications are successfully fulfilled.